Kenmore Undressed

Waterfront Construction is Leaving Kenmore – Now What?

WHO WILL CONTROL LAKEPOINTE?

There has been a long-standing and important discussion about developing the waterfront area here in Kenmore known as Lakepointe. Since 1989 there has been a proposed development of the 45 acres on Lake Washington where the Sammamish River enters the lake. It is one of those wonderfully ambitious, visionary and seemingly impossible projects that has yet to materialise.

The fact is, Kenmore’s waterfront is a a real eyesore that looks more like an industrial wasteland than a part of our city.  One of my readers recently commented:

“We have one Petunia in an onion PATCH. That would be LakePointe. If this is not developed and handled properly it will be all onions!!!!The City needs to get involved and not let greed and grandois ambition cloud their goal. The community needs to get involved and not assume someone else is watching out for their interests, no one is. We have health, environmental, clean water issues, ground water issues, storm water issues, hazardous waste issues, toxic issues, and more all on the one piece of property, LakePointe(45 acre Peninsula). We have the potential to pull Kenmore out of the designation labeled the armpit of Lake Washington,to Kenmore’s only opportunity for an economic, vibrant,environmentally friendly, community, the Last Pearl to be found, on Lake Washington, if we choose, this vision can only happen as a community effort.”

This is not an uncommon opinion expressed to me by my friends and neighbors here in “our fair city.” It’s one of those “if only” conversations about how incredible Kenmore could be if there was the vision and money to transform our truly spectacular position on Lake Washington from a gritty, off-limits wasteland to a vibrant waterfront community.

Waterfront Construction Gives Notice

Waterfront Construction is leaving in June 2010- What's going to happen now?

In a recent article in the Kenmore/Bothell Reporter by Tom Corrigan, it was reported that Kenmore’s Waterfront Construction (WC) will be leaving it’s location at the mouth of the Sammamish. WC has been the subject of a number of accusations regarding environmental violations. Several local watchdog groups have been accusing Waterfront of various questionable practices but Waterfront has indicated that this is not reason for their departure.

Is This the Beginning of Something New?

Since this news broke, a number of people have asked me what might happen with the property. Could this be the beginning of a transformation at Lakepointe? I’ve heard rumours that the City wants to purchase the property in order to create a park. I really have no idea what’s going to happen, but I think all of us here in Kenmore need to focus our attention on this development.

I would encourage you to contact the Mayor and City Council to see what they think about this situation. Don’t let this opportunity pass us by. Just click on this link for a directory:

http://www.cityofkenmore.com/Page.aspx?cid=1698

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Beware the Ides of March – Real Estate Sales in Kenmore

The Real Estate Gods Seem Calm This March 15th

Vicenzo Camuccini 1798

March is moving right along so I thought it would be fun to add a little history to my mid-month home sales post. Why not? Camuccini’s wonderfully stylised depiction of Julius Caesar’s  murder (above) has nothing to do with real estate in Kenmore, WA but it sure is an artistic reminder that his assassination took place on March 15th, 44 BC. So what has happened with the market so far this month?

Active Listings

Pending Sales

March Sold Homes as of Today

So far this month there is nothing out of the ordinary with the housing market in Kenmore. Active listings have been hovering around 120 for months. The number of pending listings has dropped since last month (some of the pendings have sold) but if we don’t see this number rise by the end of March, April sales may be sluggish.

Just remember that you only need to beware the “ides of March” if you’re Caesar!!!!

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A Story of “Mass Delusion” – Michael Lewis’ The Big Short

An Inability of the Media to Ask the Tough Questions

It has been hard for me to sit down and write on KenmoreUndressed this week. The main reason is that almost all the news coming out of the Media has been especially negative and of incredibly poor quality. I don’t know about you, but it is becoming perfectly obvious that the loss of over 40,000 professional journalists this last two years has created a knowledge vacuum. Today, the news has taken on an “Entertainment Tonight” quality that truly sucks.

Worse yet is this nagging sense I have that NO ONE knows how to tell the truth these days. Doubly worse is the fact that there are no longer journalists to call the liars out. It’s almost as if reporters are too “afraid” to do the homework and then ask the tough questions. But alas, this evening good old 60 Minutes managed to redeem, at least a little, my faith that there are some journalists paying attention to important stories.

The Story of the Subprime Mortgage House of Cards

Click this picture to view "Inside The Collapse"

Tonight 60 Minutes broadcast an interview with one of the most knowledgeable writers about the corrupt gambling house we know as Wall Street: Michael Lewis.

After you watch this video your perspective of the “free market,” executive compensation and the flaws in human nature will never be the same. Frankly, Lewis eviscerates the all-too-common idea that Wall Street (with all it’s elitist propaganda) is governed by some “universal truths” about the sacred “free market.” On the contrary, you’re going to learn just how deeply the “fix is in.” I sincerely hope that you all come away from this story with a more grounded and realistic perspective of how the uber-wealthy Wall Street fat cats aggrandise themselves, ruin economies and walk away unscathed. It’s a tragedy that has affected everyone in some profoundly negative ways.

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February 2010 Home Sales – Ouch, What Happened?

Home Sales in February Were Lethargic at Best

One year ago 10 single family homes sold in Kenmore. This year there were 14 home sales. I suppose if you’re a “glass-half-full” person this represents a 29% increase in sales. OK, I’ll grant you that. Great news for you optimists. To me, there’s something ominous about these sales figures: It doesn’t seem that the extended $8000 1st time buyer tax credit or the $6500 repeat buyer tax credit have stimulated as much activity as was hoped for.

For an interesting perspective regarding the repeat buyer credit, read “Not much impact from the repeat buyer credit,” in the February 28th Seattle Times. It seems that Americans are staying put for the time being. There’s simply too much uncertainty in the world for a lot of people: high unemployment, a grid-locked political system, natural disasters, the wars….I think it’s reasonable to conclude that Americans are hunkering down until things look and feel better.

So, let’s take a quick look at the sales from last month:

February 2010 Home Sales in Kenmore

Most of the home sales in Kenmore last month were under $400,000 (85%). Also, 50% of the home sales were new construction! As I mentioned last month, DR Horton built a community of smaller homes with some killer incentives which are selling quite well right now. Homes were selling at about 94% of the list price, which is better than last year.

For those of you interested in the current inventory, please turn your attention to the following:

Active Listings in Kenmore – Beginning of March

There are currently 111 single family homes listed in Kenmore. Last year there were closer to 140 active listings.

Pending Sales

Pending sales are always a good indication of the current market activity. Right now there are 60 pending sales. 30% of these homes are new construction. 22% are distressed properties (short sales or bank-owned homes). This is a healthy number of pending sales for the beginning of the month.

I had hoped to see more closed sales in the month of February, but the year is young and as Spring approaches we may see a reasonable up-tick in home sales.

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The Newest Disturbing Trend: Walking Away from a Mortgage

Is Walking Away from Your Mortgage Just a “Business Decision?”

Over 11 Million Families are "underwater" in their mortgages!

A quick disclaimer: The discussion below regarding “strategic defaults”(walking away from your mortgage) is a serious matter. This post is not to be considered legal advice in any way. Nor am I encouraging anyone to walk away from a mortgage. It is intended to help readers understand a disturbing and, I fear, growing trend in the housing market. If you or anyone you know is considering walking away from a mortgage CONSULT BOTH A CPA AND ATTORNEY FOR FINANCIAL AND LEGAL ADVICE.

Last year over 1 million home owners walked away from their mortgages. This is 4 times the number who did so in 2008 and experts believe the number of “strategic defaults” will rise as more and more families find themselves “under water” in their mortgages. According to an article entitled Underwater Mortgages Continue to Rise in The Bulletin (a Philadelphia area paper):

First American CoreLogic reported today that more than 11.3 million, or 24 percent, of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.

Over the last several months I have been reading quite a bit about home owners walking away from their mortgages. It’s a subject that is both disturbing and compelling given the tough times many home owners are experiencing today. And truly, if you find yourself out-of-work, paying a mortgage on a home that is “upside down” (worth less than the mortgage) what should you do?

There are a lot of  strong opinions regarding this. They stretch across a continuum of beliefs from the notion that it’s “unethical” to not pay one’s debts on the one hand to “hey, it’s just a “business decision” on the other hand. And believe me, if you read through the commentary in on-line discussions, you’ll encounter a huge amount of speculation, misinformation and many writers “practising law without a license.” One fact stands out: most people believe it’s just plain wrong to walk away from one’s debts, especially a mortgage.

Most People Agree Walking Away is Un-ethical!

But…….and it’s a big but

BUT, there’s also a growing number of economists who feel that attempting to do the right thing by paying back a mortgage (for decades) on a depreciating home is, simply put, a bad business decision not in one’s own self interest. One of the most controversial writers on this subject is Professor Brent White at the University of Arizona whose recent paper entitled ““Underwater and Not Walking Away: Fear Shame and the Social Management of the Housing Crisis,” has been creating quite a debate about the “business decision” angle of home ownership. If you click on this picture you can read it:

Click on this picture to read this paper

Dr. White is not giving advice in this academic paper but he is sending a clear message that individuals sometimes need to make hard-core decisions about paying for a home with little hope of ever making up for lost equity. Sometimes, it’s in the borrower’s best interest to put aside the morality of walking away from a mortgage and focus on one’s long-term financial interests. He suggests that taking the hit on your credit score and several years of higher interest rates may be a small price to pay compared to paying back hundreds of thousands of dollars on a depreciating home. If you want to hear an interesting interview with Dr. White go to: http://www.npr.org/templates/story/story.php?storyId=121911468 which was broadcast on NPR on December 25, 2009.

Some Consequences of “Walking Away”

I’ve had some heated “debates” with a number of writers who are quick to point out that “Wall Street” doesn’t play by the same rules that it expects of the public. Indeed, recently there were several huge corporate entities (Morgan Stanley and Tishman and Speyer Properties) that basically walked away from their multi-billion dollar mortgages. Sure, these corporations aren’t setting the best example; however, when it comes to your financial world I’d like to point out some things you must consider before walking away from a mortgage:

• First and foremost, seek the professional advice of your CPA and Attorney. There are a lot of legal and tax consequences involved in walking away
  
• Know that your credit score may drop close to 200 points by walking away from your mortgage. This is going to result in you paying higher interest rates for loans and may disqualify you from obtaining unsecured credit. Purchasing a car may become problematic
  
• If your home is in a “recourse” state, the lien holder can (and most likely will) sue you for the deficiency between what you home is worth and your mortgage. They can put a judgement on your credit report and possibly seek a garnishment of your wages and other punitive actions
• Many employers disqualify job seekers based on their credit history Worse yet, many employers terminate current employees if they file bankruptcy, experience a foreclosure or walk away from financial obligations

I hope this post has helped you understand some of the issues connected with “strategic default.” If you’re interested in learning more, here are other articles that are informative:

The Wall Street Journal – When It’s OK to Walk Away from Your Home

The Wall Street Journal – Debtor’s Dilemma: Pay the Mortgage or Walk Away

The Huffington Post – Don’t Look Back: Major Players Continue to Walk Away from Poor Mortgages

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How Many Million Dollar Homes Sell Each Month?

$1,000,000 + Absorption Rates in Puget Sound

One sector of the residential real estate market that has been pummelled by current economic times is the sale of homes that are listed for over $1 million dollars. I thought it would be interesting to show you a 5-year trend of the “absorption rates” of this special set of real estate.

The graph above shows the gap between the number of listed $Million dollar homes and those that went under contract each month since December 2005 to January of 2010. If you click on the graph you can see a larger view of these numbers. Needless to say, even in good years the inventory of expensive homes (over $1M) doesn’t turn over very quickly.

Click on this graph for a larger view

Basically, the absorption rate for this particular price-point has been hovering around 5%-6% of the inventory. So, if you are the owner of a $million dollar home and you’re thinking about selling, it behoves you to think carefully about your motivations and to select a real estate agent with experience in this calibre of home sales.

Data courtesy of Alan Pope and Assoicates.

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3 “Home Value” Websites Worth Visiting

The Internet Has Transformed the Real Estate Business

How much is your house worth today?

In the last 5 years the Internet has literally transformed the very landscape of many industries. Some industries such as Print Media have been turned inside out due to the sheer mass of information in cyberspace.

The once powerful (and some would say evil) cartel of the real estate industry has seen its exclusive grip on property information evaporate. There was a time when the average consumer was forced to consult with a real estate professional or hire an appraiser in order to get a sense of one’s property value. Many home owners resented having to deal with agents and, frankly, it was a valid concern. For over 50 years the NAR and its members held an almost exclusive monopoly on property information.

Then, in February of 2006 a revolutionary company by the name of Zillow.com hit the Internet. Zillow allows anyone to find home value information to about 90% of the homes in the U.S.. Since that time, Zillow has expanded in it’s market penetration and has captured a huge following in the industry. I remember well the utter fear and anger many real estate expressed when they realized that the public had access to what was once “the sacred data.”

Zillow, Cyberhomes and Eppraisal

In this post I would like to introduce you to three of the top “Home Value” websites so you can take them for a spin. I encourage you to look up your own home. Today I checked-out the value of my home and the values of my neighbours which was rather interesting. Also, these three are not the only sites. For a larger list of other sites free and for-profit check out “10 Home Value Websites to Look Up the Value of Your Home.”

So here are three of the best sites. Just click on the pictures to visit the sites:

Zillow.com

Click on this picture to visit Zillow.com

Cyberhomes.com

Click on this picture to visit Cyberhomes.com

Eppraisal.com

Click on this picture to visit Eppraisal.com

As a Realtor® What Do I Think About These Sites?

I believe these home value sites have a legitimate place in the real estate industry. Some professionals feel that they are not “accurate” enough or that they compete directly against real estate agents. The fact is, many of these sites encourage agents to post their listings on the site. There’s a lot of paid advertising that hawks real estate services. Let’s face it, this is how they stay in business.

But are these sites accurate? Well, Zillow.com posts statistics regarding the accuracy of its “Zestimates” and, generally speaking in most markets the value provided by Zillow can be 10% to 23% in error. That’s not to say that these sites are bad. Frankly, I’ve found them to be relatively accurate in neighborhoods where there are similar homes (suburban neighborhoods tend to have consistent home values) or where there have been a lot of sales. On the other hand, it’s no surprise that more rural areas have higher error percentages. Just keep in mind that these sites provide “estimated market values.” They are not appraisals. I do think that consumers can learn a lot by doing some preliminary research on the Internet.

Now I get to do my pitch: I highly recommend that if you intend to sell your home you should contact a real estate professional or Realtor® to give you his/her professional opinion about your property value. In many cases I have found my comparative market analyses to be more accurate and realistic than those on Zillow.com. There’s something about being at ground zero and having years of experience in a particular area that gives agents a deeper perspective of home values. Nevertheless, I think that if you’re curious about the housing market, use these sites. They’re interesting and informative.

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Kenmore Home Sales, Janary 2010 – Not Bad Compared to 2009!

Warm Weather Brought a Warmer Real Estate Market to Kenmore

Last night I attended our neighborhood annual Home Owner’s Association Meeting and there was a lot of concern about property values and questions about how the real estate market was going to perform in 2010. There is no reason to believe that 2010 will bring much change to this tough market. Lending continues to be tight and I have a sense that the job market will have more of a negative impact on the market than does price or inventory. Even so, last month buyers were obviously taking advantage of tax credits and low interest rates. So let’s take a quick look at January which turned out to be a good month for home sales in Kenmore:

ACTIVE LISTINGS

We saw a 31% decrease in inventory compared to last January (148). I believe a lot of homeowners have finally realized that unless they absolutely MUST move, they are staying put. One interesting factor this last month was the number of new construction homes that were offered and sold. Currently, 27% of the active listing are new construction and many of these homes (DH Horton homes) are smaller 1500-2000 square foot houses at the low $300,ooo price point. It was a smart move to build smaller. The builder is also offering some attractive buyer’s incentives. 39% of the inventory has dropped in price and many of these price reductions are significant.

PENDING SALES

Pending sales are encouraging as they represent homes that are in the sales process. Last January there were only 19 pending sales. It’s also a positive sign that the days-on-market are fairly low at 64 days. Something to keep in mind is that 43% of the pending sales are new construction. Only 16% were “distressed” properties.

SOLD HOMES

Last January there were a whopping 8 homes that sold! We did much better this year. Of course, this time last year we were still recovering from the most severe winter in many years and that certainly made things tough; however, it’s nice to see that we had some good activity. I would like to point out that fully 58% of the homes that sold last month were new construction, most of which were the lower priced properties. As the new homes are sold out, it will be interesting to see how the remaining inventory will sell. I can tell you that selling a home that’s over $450,000 is  challenging.

So the 2010 real estate market started out much better than last year. Let’s hope that the momentum continues. If you have any questions regarding the Kenmore housing market or have questions about the value of your home, please give me a call at 206.713.2102 or email me at jlupori@gmail.com.

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A Stunning Discovery – Our 1st Home Is “For Sale” and We Want To Cry!

Seeing Our First Home “For Sale” Is a Real Wake Up Call!

Our 1st Home circa 1990 in Shoreline, WA

My wife and I have a confession to make: We bought our first home because there was a raspberry patch in the back yard. Yup. That’s what sold us on the place! We were looking for a house with room for a garden and when we ate some of those sweet, ripe berries we were hooked. When we think back on it, we realize that we should have spent more time looking at the house itself because….well, we have 16 years of “home project” stories to share with you if you ever want to hear them.

It’s a classic story. We had been looking at homes in 1989 which was a tough time for a young couple to be buying their first house. Prices were rising, interest rates weren’t all that great (our first mortgage was at 10.25%) and a huge number of homes were being purchased by Californians who saw good values in Puget Sound. We had looked at a huge number of homes with our VERY PATIENT real estate agent and were losing patience as we kept getting beaten out of sales left and right. Luckily,  our agent found a home that wasn’t yet listed and a contractor who was anxious to make a deal. Well, we ended up writing our offer on the hood of a car in the parking lot of the Seattle Center during the Bite of Seattle on a warm July evening. We were excited and really, really scared!

We lived in our little house (barely 800 square feet) for 16 years. There was hardly one square inch of the place that we didn’t alter, remodel, tweak or paint. When it came to the yard Virginia was the “Flower Lady” and I was the “Vegetable Guy.” Necessity forced me to learn all about the challenges of owing an old home. Sometimes this was not very fun but today, as a real estate agent, the experiences of fixing that little house have made me a better advocate for my clients. I still can’t fix a leaking faucet!

The truth is, WE REALLY LOVED OUR HOUSE. Several of our cats were born, grew-up and died at that house. We entertained and frolicked there. It was a wonderful little universe that we made our own for many, many years. That’s why, when I drove through the old neighborhood on the way home from an appointment today, I was shocked to see a “For Sale” sign in front of our first house. A wave of intense emotion literally gripped me as I pulled into the driveway and saw the old house all “prettied-up” for potential buyers:

Manicured and "prettied-up" for sale!

When I drove up to the house, I discovered it was vacant. I have to tell you, I really struggled to get the key and go into our old house. I had not been in the home since we sold it and moved here to Kenmore in 2005 and I wasn’t sure how I was going to feel walking into a place where my wife and I had lived for so long…………..

As it turned out, I was surprised to find that the home was almost the same as we left it 5 years ago.  I was also overcome with a sense that Virginia and I had been good stewards of this little house as had the last owner. We really exerted a lot of  hard work to make the house a better place when we lived there and as I write these words I’m proud that it’s going to be another lucky family’s home. It really is a cute little place.

When I got home today to share my experience and pictures with my wife she was very emotional. After all, we were in our 20’s when we bought the house and we became “real adults” living there with our crazy cats.  It was a time in our lives when we learned how to deal with many of the challenges life throws at us. Most importantly, we share some wonderful memories of good times and creating a life together in that little house. I hope the new owners find as much joy there as we did.

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A Snap-Shot of the Kenmore City Council Retreat

Some Excellent Priorities Identified

Last Wednesday I posted the first “official poll” on Kenmore Undressed in anticipation of the Kenmore City Council Retreat that convened this last weekend. I asked what the most important priorities are for the City of Kenmore in 2010. So far I’m pleased with the number of votes and the poll is still active for those of you who would like to add your two cents! Here’s what it looks like so far:

Click this picture to answer the poll!

Today I received a quick summary of the City Council’s retreat from Councilman Bob Hensel. It’s interesting to compare those priorities identified by the council and some of the issues I raised in the poll. Here’s Bob’s summary:

The top 5 are as follows,

1. The completion of the 522 project which will assist in attracting new businesses.
2. Working to reopen the CAWM pool at St Edwards as the council realizes the longer the pool stays closed the the more difficult it will be to reopen.
3. Economic development which includes implementing the plan put forward by the Citizens Advisory Committee and approved by the council last summer. Note that plan includes attracting new businesses, downtown,lakepoint, and more.
4. Completing a parks plan which provides for more active park space and and financing options.
5. Review of current police services and the contract with King County. The annexation of Finn Hill (unincorporated King County) to the city of Kirkland and other changes to services provided by King County in 2012 need to be addressed now.
This is only a brief synopsis of each priority, a lot of discussion went into getting to this point and there is a lot more meat on the bones of each priority.

I’d like to thank the City Council for some good brainstorming at their retreat. As a resident of Kenmore and a Real Estate Agent, I’m encouraged by the Council’s focus on business development while at the same time working to preserve Kenmore’s landmarks and natural resources. 2010 is going to be a challenging year. I sincerely hope some of you out there get involved in making Kenmore a 21st Century City.

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